Are You or Your Partner Committing Financial Infidelity?

You'd be surprised just how many people lie, cheat, and basically steal from their spouses. Learn how to protect your relationship (and your wallet).

Denise* was keeping a lot of secrets from her husband: deleting voicemails, sneaking things into the house, intercepting mail. After 13 months, the stress from all of her cloak-and-dagger dealings became so intense that the 38-year-old mom came down with shingles (a disease that usually strikes the old and frail). Denise wasn't having a torrid affair — she was hiding tens of thousands of dollars in debt from her congenitally frugal husband. When balances on her four credit cards became alarming, she had her bills sent to her parents' house. "I live in fear every day that he'll find out. I truly worry that he'd leave me if he knew," she says. So Denise recently cashed out $20,000 from her 401(k), also without his knowledge, to pay everything off.

Experts have a name for Denise's maneuvering: financial infidelity. And they say it can prove as damaging to a relationship as adultery. In 2010, a survey by the National Endowment for Financial Education found that 31 percent of people admitted to hiding information about debt, purchases, or bank balances from their spouses. And financial infidelity is harder than ever to conceal because of the recession and the shaky employment market, says Amanda Clayman, a financial therapist in New York City. A laid-off partner may feel ashamed about his or her inability to contribute to the family, and that "can lead to hiding purchases big and small," she says. Clayman has also seen spouses, spooked by the current economic instability, tuck away money from their more spendy partners, stashing it in secret accounts. "I don't think calling this behavior infidelity is overstating it," she says. "When someone does something to breach the trust in a relationship, it's a betrayal."

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MONEY IS POWER

Why are so many couples spending, saving, and making deals behind each other's backs? Sometimes it comes down to a subconscious power play, says financial psychologist Brad Klontz, author of Mind Over Money. Secret shopping for "frivolous" things like clothes, shoes, or electronics can be a form of rebellion for a partner who feels penned in by a household budget. Denise found it grimly satisfying to make an end run around her more penny-pinching spouse. "I felt like I should have been able to keep some money for myself," she explains. "I earned it!" Her paychecks were sucked up by bills and items for the kids, and when she didn't have anything left to splurge on herself, she just charged what she wanted. Amber, 37, a mom of three, played the classic "hiding the shopping bags" game with her husband, spending $200 a week on things she found on sale and racking up a few thousand dollars in debt. "I'd hit the mall after work and stash the stuff in the back of a closet before he got home," she says. "For a while, I was making most of the money and felt entitled to spend it however I wanted — clothes, shoes, makeup, you name it. If I wanted it, I bought it. Of course, I felt guilty about it; if you're being sneaky, you already know it's wrong."

The higher earner, female or male, should never hold all the cards. Andrea, 33, accepted that her husband made $180,000 more a year as an engineer and real estate investor than she did as a schoolteacher, but he seemed to enjoy the power differential it created: "When I needed money for the kids or myself, he'd always give it to me, but there was a parent-child dynamic to it. I hated having to ask." And he spent big money without consulting her. Imagine her surprise when, one night, he pulled up in a Mercedes, bought in cash. They had discussed his getting a new car, but she'd objected to such a luxury item since they had a newborn at home. After that, she demanded that he add her to all of his accounts. He agreed, but she learned later he still had a secret account to continue some business ventures under the radar. "I was devastated," she says. "We stopped being a team." Now, the couple is trying to work it out in counseling.

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Caroline, 40, an advertising exec in Seattle, keeps a secret stash to gain a sense of control in the face of real uncertainty. She's been quietly socking money away since her husband's salary was cut 10 percent last year. "We fight all the time about money — he's a spender, I'm a saver," she says. The tension has been so high that both of them have threatened divorce. Caroline says her initial goal was to save $5,000 for a "rainy day" when she might not have a partner. Today, the balance in that account is closer to $12,000. "It's just sitting there," she says. "The last time I put money in there, I thought, Oh, geez, this is really bad, especially when we were struggling to come up with money for our mortgage. But I need that safety net. You can't rely on anything these days."

*Names and details have been changed.

Ray Kachatorian

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LETTING GO OF SECRECY

Caroline's money and security fears are legitimate, says Clayman — but keeping the account secret from her husband isn't. "I've seen many couples divorce over financial deceit. The spouse feels blindsided by the elaborate lies that may have gone on for years. Sometimes people just can't get over that." The longer the lying goes on, the worse the reaction is likely to be, so Clayman urges her clients to come clean.

Amber, who used to hide her spending from her husband, says she knew she had to tell him the truth when she saw him with his head in his hands and near tears while going over their bills one night. "He kept shaking his head, asking, 'Why is money always so tight?' and I knew the answer was me," she says. She confessed about her weekly shopping habit, her credit card debt, everything, and the blowback she expected never came. In fact, Amber's husband was relieved. "I think he was just happy that we were finally able to put an end to years of money stress," she says. "He was far more forgiving than I might've been." Now the couple talks openly about their spending and saving plans, something Clayman says is an absolute must. "The privacy limits are different for every couple," she says. "It might be that they agree to have intimate knowledge of every single financial transaction, or maybe they have separate accounts, or agree to get their partner's approval before they buy something over a certain amount. The point is that they have to decide what's okay together, to avoid any surprises."

Recently, Amber went shopping with a friend and saw a pair of jeans she wanted. "I texted my husband to double-check the budget and see if we could afford them. We couldn't," she says. "Before, I would've resorted to being sneaky and felt guilty. Now, I'm buying less, but I feel like I have so much more."

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